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Certified Treasury Professional Questions 281–285 (page: 58)

Updated On: 9-Feb-2026

What is this firm’s residual income?

Revenues: $110,000
Expenses (including COGS and all taxes): $87,000 Internal rate of return: 8.5%
Capital Investment: $55,000 ROI: 8.0%
Cost of capital: 11%

  1. $16,500
  2. $16,950
  3. $18,325
  4. $18,600

Answer(s): B



The yield curve is inverted. A creditworthy firm considering alternative debt maturities would MOST LIKELY:

  1. enter into a short-term floating rate agreement.
  2. obtain long-term fixed interest rate debt.
  3. roll-over short-term debt at each maturity.
  4. obtain a long-term floating rate agreement.

Answer(s): B



BEA Company has determined its breakeven dollar amount for concentrating remote funds is $550.00. BEA Company has a daily earnings rate of 6% and gains one day of accelerated funds. If a wire costs BEA $35.00 dollars, what is the cost of an electronic funds transfer for BEA Company?

  1. $1.00
  2. $2.00
  3. $3.00
  4. $4.00

Answer(s): B



Which of the following types of risk would an investor who does NOT receive payments on a security under the original terms be subject to?

  1. Price
  2. Credit
  3. Asset liquidity
  4. Foreign exchange

Answer(s): B



A portfolio manager wishes to make a short-term investment. His investment policy requires that short-term investments be low risk and secured, have a fixed interest rate and be highly liquid/redeemable prior to maturity. Which of the following should the manager choose?

  1. Asset-backed commercial paper
  2. Bank obligations
  3. Commercial paper
  4. Government treasury bills

Answer(s): A



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